Cap Table
A spreadsheet or table that details the ownership structure of a company, commonly used by portfolio companies or early-stage ventures. It lists the various equity interests, including common shares, preferred shares, options, promissory notes, warrants, SAFEs, and other securities, along with the prices paid by each holder. The table presents ownership on both an actual […]
Capital Account Statement
A document that details an investor’s capital contribution, their percentage ownership in the SPV, and the underlying assets of the SPV.
Capital Call
A request made by an SPV for additional capital from investors when the funds initially collected are insufficient to meet the obligations outlined in the asset acquisition or purchase document. If the required additional capital exceeds the current available funds but is still within the total subscribed capital, the SPV issues a capital call to […]
Carry (Carried Interest, Profits Interest)
A performance-based fee paid to the Organizer and other designated third parties as specified in the Operating Agreement, calculated as the net proceeds received by an SPV upon a liquidity event, minus the initial investment. Carry is typically paid after investors have received a return on their investment. Note: Under the Tax Cuts and Jobs […]
CEO (Chief Executive Officer)
The highest-ranking executive in a company, responsible for developing and executing high-level strategies, making major corporate decisions, overseeing overall operations and resources, and serving as the primary liaison between the board of directors and corporate operations. The CEO typically holds a position on the board of directors and, in some cases, may also serve as […]
Certificate of Formation (Certificate of Organization, CoF, CoI)
A document filed with state authorities, typically the Secretary of State or Division of Corporations, to establish a limited liability company (LLC) or limited partnership (LP). As required by state LLC laws, the certificate generally includes the LLC’s purpose, principal place of business, and the names of its initial members or managers. In most states, […]
CFO (Chief Finance Officer)
The senior executive responsible for overseeing and managing the financial activities of a company, including financial planning, risk management, record-keeping, and financial reporting.
Charter (Certificate of Incorporation, Articles of Incorporation)
A legal document that establishes the formation of a corporation. Issued by a federal or state government, the charter converts a business entity, such as a partnership or sole proprietorship, into a legally recognized corporation. The charter typically includes the corporation’s name, principal office location, date of incorporation, the types and amounts of stock to […]
Close
To finalize an SPV, meaning the organizer uses the funds received from investors to purchase an asset. Upon completing the purchase, the SPV executes a purchase agreement and is listed on the relevant company’s or project’s capitalization table. The closing of an SPV triggers several required actions, including countersigning SPV fund documents, generating capital account […]
Close Date
The date on which a closing event occurs, triggered by the earliest of the following, as defined by the Federal Securities and Exchange Commission: (1) the use of investor funds, either through signing investment documents (entering into a contract to invest in a portfolio company) or wiring funds to a portfolio company or other issuer; […]
Closing (Multiple)
The process of new investors and/or additional capital investing in the same portfolio company or asset through the same legal entity during the same round of financing. SPVs will often have multiple closes by raising additional funds after an initial investment is made into the target company or asset.
Conversion Price
The price at which a convertible note or SAFE converts into equity. It is typically the lower of either (1) the price paid per share in the most recent equity round, adjusted for a discount rate, or (2) the valuation cap divided by the total shares of fully diluted equity.
Convertible Note (Convertible Promissory Note, Convertible Debt, Convertible Loan)
A short-term debt instrument that converts into equity at a later date, typically used by early-stage companies to raise capital without immediately issuing ownership equity. In a convertible note, the investor lends money to the company with the intention of converting the loan into equity rather than receiving cash repayment. Commonly used by seed-stage startups, […]
Counsel (Lawyer, Legal Counsel, Advocate, Attorney)
A professional who practices law, applying legal knowledge, procedures, and experience to address specific legal issues or advance the interests of clients. A lawyer is licensed to practice in a particular jurisdiction after passing the required state bar examinations. In the context of an SPV, counsel typically provides assistance with fund documents, purchase agreements, securities-related […]
CPA (Certified Public Accountant)
A designation granted by the American Institute of Certified Public Accountants (AICPA) to individuals who pass the CPA exam and meet the required work experience. CPAs are recognized for their expertise in income tax preparation but may also specialize in areas such as auditing, bookkeeping, fund accounting, forensic accounting, managerial accounting, and information technology. CPAs […]